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Modelling basin level allocation of water in the Murray Darling Basin in a world of uncertainty

Author

Listed:
  • David Adamson

    (Risk and Sustainable Management Group, University of Queensland)

  • Thilak Mallawaarachchi

    (Risk and Sustainable Management Group, University of Queensland)

  • John Quiggin

    (Risk & Sustainable Management Group, School of Economics, University of Queensland)

Abstract

The Murray-Darling Basin comprises over 1 million km2; it lies within four states and one territory; and over 12, 800 GL of irrigation water is used to produce over 40% of the nation's gross value of agricultural production. This production is used by a diverse collection of some-times mutually exclusive commodities (e.g. pasture; stone fruit; grapes; cotton and field crops). The supply of water for irrigation is subject to climatic and policy uncertainty. Variable inflows mean that water property rights do not provide a guaranteed supply. With increasing public scrutiny and environmental issues facing irrigators, greater pressure is being placed on this finite resource. The uncertainty of the water supply, water quality (salinity), combined with where water is utilised, while attempting to maximising return for investment makes for an interesting research field. The utilisation and comparison of a GAMS and Excel based modelling approach has been used to ask: where should we allocate water?; amongst what commodities?; and how does this affect both the quantity of water and the quality of water along the Murray-Darling river system?

Suggested Citation

  • David Adamson & Thilak Mallawaarachchi & John Quiggin, 2005. "Modelling basin level allocation of water in the Murray Darling Basin in a world of uncertainty," Murray-Darling Program Working Papers WPM05_1, Risk and Sustainable Management Group, University of Queensland.
    • Handle: RePEc:rsm:murray:m05_1
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    File URL: http://www.uq.edu.au/rsmg/WP/WPM05_1.pdf
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    References listed on IDEAS

    as
    1. Rasmussen, Svend, 2003. "Criteria for optimal production under uncertainty. The state-contingent approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(4), pages 1-30.
    2. C. J. O'Donnell & W. E. Griffiths, 2006. "Estimating State-Contingent Production Frontiers," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(1), pages 249-266.
    3. Quiggin, John C., 1991. "Salinity Mitigation in the Murray River System," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 59(01), pages 1-13, April.
    4. Chambers, Robert G. & Quiggin, John C., 2004. "Technological and financial approaches to risk management in agriculture: an integrate approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 48(2), pages 1-25.
    5. John Quiggin & Robert G. Chambers, 2003. "Drought policy: A state-contingent view," Murray-Darling Program Working Papers WPM03_1, Risk and Sustainable Management Group, University of Queensland, revised Aug 2003.
    6. Chambers,Robert G. & Quiggin,John, 2000. "Uncertainty, Production, Choice, and Agency," Cambridge Books, Cambridge University Press, number 9780521785235, January.
    7. Hall, Nigel H. & Mallawaarachchi, Thilak & Batterham, Robert L., 1991. "The Market for Irrigation Water: A Modelling Approach," 1991 Conference (35th), February 11-14, 1991, Armidale, Australia 145889, Australian Agricultural and Resource Economics Society.
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    Citations

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    Cited by:

    1. John Quiggin, 2008. "Managing The Murray-Darling Basin: Some Implications For Climate Change Policy," Economic Papers, The Economic Society of Australia, vol. 27(2), pages 160-166, June.
    2. David Adamson & Thilak Mallawaarachchi & John Quiggin, 2006. "State-contingent modelling of the Murray Darling Basin: implications for the design of property rights," Murray-Darling Program Working Papers WP2M06, Risk and Sustainable Management Group, University of Queensland.
    3. Venn, Tyron J. & Quiggin, John, 2007. "Accommodating indigenous cultural heritage values in resource assessment: Cape York Peninsula and the Murray-Darling Basin, Australia," Ecological Economics, Elsevier, vol. 61(2-3), pages 334-344, March.
    4. John Quiggin & Robert G. Chambers, 2006. "The state-contingent approach to production under uncertainty ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(2), pages 153-169, June.
    5. David Adamson & Thilak Mallawaarachchi & John Quiggin, 2009. "Declining inflows and more frequent droughts in the Murray-Darling Basin: climate change, impacts and adaptation ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(3), pages 345-366, July.
    6. David Adamson & Thilak Mallawaarachchi & John Quiggin, 2007. "Climate change and climate uncertainty in the Murray-Darling Basin," Murray-Darling Program Working Papers WP2M07, Risk and Sustainable Management Group, University of Queensland.
    7. John Quiggin & David Adamson & Sarah Chambers & Peggy Schrobback, 2009. "Climate change, mitigation and adaptation: the case of the Murray–Darling Basin in Australia," Murray-Darling Program Working Papers WP3M09, Risk and Sustainable Management Group, University of Queensland.
    8. John Quiggin & David Adamson & Sarah Chambers & Peggy Schrobback, 2010. "Climate Change, Uncertainty, and Adaptation: The Case of Irrigated Agriculture in the Murray–Darling Basin in Australia," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(4), pages 531-554, December.
    9. Venn, Tyron J. & Quiggin, John C., 2006. "Accommodating Indigenous Cultural Heritage Values in Resource Assessment," 2006 Conference (50th), February 8-10, 2006, Sydney, Australia 139919, Australian Agricultural and Resource Economics Society.
    10. Schrobback, Peggy & Adamson, David & Quiggin, John, 2008. "Options for salinity mitigation in the Murray-Darling Basin," Risk and Sustainable Management Group Working Papers 149872, University of Queensland, School of Economics.
    11. Graeme J. Doole & David J. Pannell, 2012. "Empirical evaluation of nonpoint pollution policies under agent heterogeneity: regulating intensive dairy production in the Waikato region of New Zealand," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 56(1), pages 82-101, January.
    12. Quiggin, John & Chambers, Robert G., 2005. "The state-contingent approach to production and uncertainty," Risk and Sustainable Management Group Working Papers 151168, University of Queensland, School of Economics.
    13. Jerry Courvisanos, 2009. "Regional Innovation for Sustainable Development: An Australian Perspective," Journal of Innovation Economics, De Boeck Université, vol. 0(1), pages 119-143.

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    More about this item

    Keywords

    Water; Uncertainty; Salinity; GAMS v EXCEL & Optimisation;
    All these keywords.

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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